Economy

SANTA CLARA, California (Reuters) -Taiwan Semiconductor Manufacturing Co said on Wednesday that a new chip manufacturing technology called “A16” will enter production in the second half of 2026, setting up a showdown with longtime rival Intel (NASDAQ:INTC) over who can make the world’s fastest chips.TSMC, the world’s biggest contract manufacturer of advanced computing chips and a key supplier to Nvidia (NASDAQ:NVDA) and Apple (NASDAQ:AAPL), announced the news at a conference in Santa Clara, California, where TSMC executives said that makers of AI chips will likely be the first adopters of the technology rather than a smartphone maker. Analysts told Reuters that the technologies announced on Wednesday could call into question Intel’s claims in February that it will overtake TSMC in making the world’s fastest computing chips with a new technology Intel calls “14A.”Kevin Zhang, TSMC’s senior vice president of business development, told reporters that the company has developed its new A16 chipmaking process faster than expected because of demand from AI chip firms, without naming specific customers.AI chip firms “really want to optimize their designs to get every ounce of performance we have,” Zhang said.Zhang said that TSMC does not believe it needs to use a ASML (AS:ASML)’s new “High NA EUV” lithography tool machines to build the A16 chips. Intel last week revealed that it plans to be the first to use the machines, which can cost $373 million each, to develop its 14A chip.TSMC also revealed a new technology for suppling power to computer chips from the backside of the chip, which helps speed up AI chips and will be available in 2026. Intel has announced a similar technology intended to be one of its primary competitive advantages.Analysts said the announcements called into question Intel’s claims that it will retake the world chipmaking crown.”It’s debatable, but on some metrics, I don’t think they’re ahead,” Dan Hutcheson, vice chair at analyst firm TechInsights, said of Intel.But Kevin Krewell, a principal at TIRIAS Research, cautioned that both Intel and TSMC’s technologies remain years away from delivering the technology and will need to prove that real chips match their keynote presentations. More

A UK deal to harmonise veterinary standards with the EU could boost British agrifood exports to Europe by more than 22 per cent, according to researchers.The estimate, published in a joint paper from Aston University and the University of Bristol, is based on an analysis of 279 previous trade agreements and export statistics from more than 200 countries. The study predicted imports from the EU would also increase by 5.6 per cent if there was a deal.The opposition Labour party, which polls suggest is on track to win power in the general election expected this year, has committed to signing a new veterinary agreement with Brussels as part of its plans to improve post-Brexit trading arrangements with the EU.Jun Du, professor of economics at Aston University, said that because the UK was previously aligned with EU standards and had not diverged significantly since Brexit, it was likely to feel the benefits of a veterinary deal faster than was normal.“Until recently, the UK had frictionless agrifood exports to the EU, so it’s possible that a supplementary veterinary agreement to reduce some of the frictions created by Brexit could allow trade that previously existed to pick up again quite quickly,” she said.John Springford, associate fellow at the Centre for European Reform think-tank, said that if the full 22.5 per cent boost to exports was realised, it would translate to an increase of about £2bn in UK agrifood exports to the EU, based on 2023 food exports of £8.6bn to the bloc.“That’s not nothing, and would be helpful to British food producers, but it is a small boost when compared to total export volumes to the EU, which amounted to £150bn in 2023,” he added.Since Britain left the EU, the UK food and drink industry has faced the full panoply of border checks on its exports to the bloc. The paper found this had contributed to a 5 per cent fall in exports to its largest trading partner between 2019 and 2022, a period when exports to the rest of the world were growing. The food and drink sector employs a total of 4.2mn people in the UK, with global exports of food, feed and drink worth a total of £25bn in 2022, according to government statistics.The ruling Conservative party has ruled out seeking a veterinary deal with the EU, arguing that the UK needs to remain independent of the bloc’s rules in order to strike trade deals with other countries and seize the benefits of regulatory divergence with Brussels.Nick Thomas-Symonds, the shadow Cabinet Office minister who is expected to be put in charge of Labour’s promised re-engagement with Europe, confirmed his party would seek a veterinary agreement but would remain outside the EU single market and customs union. “At a time when businesses and shoppers are being hit so hard by Tory economic chaos, Labour has said that we would work to improve the UK’s relationship with the EU to deliver for British people, including through seeking to negotiate a veterinary agreement,” he said.Greg Messenger, a trade specialist at the University of Bristol and co-author of the paper, said it was assumed to be unlikely that a UK government would accept the kind of “dynamic” alignment seen with Switzerland’s agreement with Brussels, in which the Swiss largely followed all EU laws.“As we wouldn’t expect to eliminate all paperwork, we could both agree that our rules meet each other’s standards for phytosanitary protection. As most of our rules are still essentially the same as the EU, that wouldn’t require any major change,” he said.All the major UK trade groups, including the British Chambers of Commerce and the Food and Drink Federation, the food industry lobby group, have called on the government to seek an improved veterinary deal with the EU.Balwinder Dhoot, director of growth at the FDF, said the group was interested in any discussion of a possible agreement, but warned that a deal would come with trade-offs that would require careful management. “Negotiating this wouldn’t be easy and would require compromises as well as gains, which would need to be carefully worked through alongside industry,” he said. More

Taiwan is aiming for trade deals with more countries after breakthroughs with three G7 economies last year, Taipei’s trade tsar said in an exclusive interview.Last year was “a good year for Taiwan because we have laid a solid foundation with the US, UK and Canada”, said John Deng, Taiwan’s longest-serving cabinet member, who is currently a minister without portfolio and head of the Office of Trade Negotiations. “Precedents set by these three can encourage other countries to follow suit. I hope other countries can overcome their reluctance and be open to trade deals and trade talks with us.”Deng sat down with Nikkei Asia weeks before president-elect Lai Ching-te is due to replace two-term leader Tsai Ing-wen on May 20, continuing the reign of the pro-sovereignty Democratic Progressive party. Lai’s victory in the January election was seen as a repudiation of China’s hardline approach towards its neighbour, which includes relentless military incursions as well as economic and other forms of coercion.The Communist party government in Beijing claims Taiwan as its own territory, although it has never controlled it, and has not ruled out an invasion. Its strategy has long been to isolate the democracy of 23.5mn people in the international community, pressuring other countries not to engage with Taipei. But 2023 appeared to mark a turning point, as Tsai’s administration managed to ink trade arrangements with the three advanced economies.“Trade deals strengthen Taiwan’s international legal status and support Taiwan’s desire to remain an active partner on the world stage,” Deng said. “Signing a trade deal also demonstrates Taiwan’s capacity to commit to an agreement with another country. For example, a deal between the US and Taiwan needs approval by the US Congress and the Legislative Yuan, so its legal status is very solid.”He added that “more trade agreements will strengthen Taiwan’s security and contribute to peace and stability across the Taiwan Strait in a meaningful way, and align with what many in the international community, including G7, want”.John Deng, head of Taiwan’s Office of Trade Negotiations, said: ‘More trade agreements will strengthen Taiwan’s security and contribute to peace and stability across the Taiwan Strait in a meaningful way’ More

Smaller companies play a big role in Japan’s electric vehicle battery supply chain, indirectly supporting the likes of Toyota Motor and Tesla. But many are struggling to keep pace with the speed and scale of investment needed as EV demand booms, threatening to create bottlenecks in an industry that Tokyo is keen to promote.“We recently received requests from Europe, the US, China and South Korea — including two major automobile companies — to buy our machines, but we turned them all down,” the president of a Japanese machine maker told Nikkei Asia. “There’s just no room in our production capacity right now.”The company manufactures factory equipment used to produce EV batteries. It is spending tens of millions of dollars to build a plant in western Japan that is set to be ready this year, but this will cater to demand from existing customers such as Panasonic.The president said the company halted an additional investment plan that could cost about the same as the first over concerns that borrowing money from a bank would be too big a burden.“A company our size would need to put most of our existing buildings up as collateral to borrow money from the bank,” he said. The company, which only has about 100 employees, does not have many assets left that have not already been used for collateral, meaning that it would have to borrow money for the next investment at much higher interest rates. He said he would have to rely on government subsidies to move forward.Lithium-ion batteries on display at the Panasonic booth during the 2015 International CES at the Las Vegas Convention Center More

The Finance Ministry said in a statement the bill contains most of the regulations needed to implement the constitutional amendment approved last year, and that a second proposal will be sent to lawmakers in the coming days specifically addressing management and oversight of the new taxes.The reform’s goal is to enhance productivity by streamlining Brazil’s complex tax framework, known for burdening businesses with significant compliance costs.The reform consolidates five existing levies into a value-added tax (VAT) with separate federal and regional rates, to be determined through the complementary bills. Full implementation of the new taxes is expected only in 2033.It also introduces a selective tax targeting products considered harmful to the environment and health.Speaking to reporters, Finance Minister Fernando Haddad said that the consumption tax rate is currently around 34%. With the reform and its regulation, the expectation is that the system will become digital and curb evasion and fraud, which could pave the way for this rate to be reduced even with the foreseen exceptions for some sectors, he said. Bernardo Appy, the ministry’s tax reform secretary, said that the expected average rate with the reform would be 26.5%.Haddad, who went to Congress to deliver the text, also said the tax reform should drive down prices of popular consumer products as they will no longer be subject to multiple layers of taxes.The government will disclose more details of the bill in a press conference on Thursday morning, he said. More

(Reuters) -Ford Motor Co posted first-quarter earnings on Wednesday that beat Wall Street’s expectations, bolstered by a strong performance in its commercial vehicle division and an increase in its hybrid vehicle sales. The company said it expects to achieve the higher end of its projected annual guidance of $10 billion to $12 billion in earnings before interest and taxes. Ford (NYSE:F) shares rose more than 3% in after-market trading on the news.Still, Ford is grappling with what CEO Jim Farley called “a huge drag not just on Ford, but on our whole industry”: electric vehicle production.The carmaker recorded a $1.3 billion operating loss for its EV and software division in the first quarter. More broadly, executives expect this section of the company to sustain a pre-tax loss of between $5 billion to $5.5 billion for the year.In the near term, hybrids are a top priority for Ford to ease customers into a battery-powered future, and the auto company aims to increase hybrid sales by 40% this year and quadruple them in the coming years. Farley said he has walked back some of the Ford’s EV ambitions to better match consumer demand. This month, Ford delayed the planned launches of three-row EVs in Canada and its next-generation electric pickup truck built in Tennessee. Executives have said they will not launch the next generation of Ford’s EVs until they can be profitable. The EV business has proven tough not just for legacy automakers like Ford, but also for pure EV players like Tesla (NASDAQ:TSLA). Elon Musk’s company recently laid off 10% of its global workforce and on Tuesday posted the first decrease in quarterly revenue since the pandemic.’CONTINUOUS MARCH DOWN’Ford expects EV production costs to come down, but to be largely offset by intense pricing pressure from industry competitors, said Chief Financial Officer John Lawler. “The last 12 to 18 months, it’s just been a continuous march down on the top line, which is offsetting any of the savings we’ve had from a cost standpoint,” he said of the EV business.Ford is also shifting focus to producing larger electric trucks and SUVs, as well as affordable and smaller EVs that are being developed by a “skunkworks” team in California. The company posted a rare 13% drop in quarterly revenue for its gas-engine business, which the company blamed on the launch of the new F-150 pickup truck. The automaker will likely have slower, more deliberate launches in the future in its effort to root out costly quality issues, executives said. The Dearborn, Michigan, automaker’s strong commercial business continues to fuel its bottom line, and the company is betting on software-related services in this division to drive profits in the coming years. That unit had operating profit margins of almost 17% in the quarter.Ford posted quarterly adjusted earnings of 49 cents per share for the quarter ended March 31, compared with 63 cents per share a year earlier. Analysts, on average, expected Ford to report an adjusted profit of 40 cents per share, according to LSEG data.General Motorson Tuesday reported quarterly results that topped Wall Street targets and the automaker raised its annual forecast, citing stable pricing and demand for gasoline-engine vehicles. Some analysts sounded a note of caution on the broader economic environment in which Ford and other automakers are operating.”With auto inventories now at much higher levels and a higher-for-longer interest rate scenario unfolding, we expect new vehicle prices to remain under pressure and incentives to continue increasing,” CFRA Research analyst Garrett Nelson said in a research note. More

(Reuters) – A look at the day ahead in Asian markets.The depreciation of Asian currencies against the U.S. dollar, and the steps monetary authorities may take to prevent further weakness, dominate the market landscape across Asia on Thursday as the Bank of Japan gets its two-day policy meeting underway.The regional economic data highlights include South Korea’s first quarter GDP, Malaysian consumer price inflation for March, and the latest trade figures from Vietnam and Hong Kong. After-the-bell earnings from U.S. tech giant Meta (NASDAQ:META) on Wednesday could weigh on Asian markets – shares plunged 10% in after-hours trade.Sentiment is fragile: some stock markets have recovered around half of their recent losses but Meta’s slump throws a cloud over that, while U.S. bond yields spiked following a weak auction of five-year notes. Unease around currencies is deepening after the dollar on Wednesday smashed through 155.00 yen with no sign of Japanese authorities to slow or reverse the yen’s fall. Will Tokyo act?An executive from Japan’s ruling LDP told Reuters the party is not yet in active discussion on what yen levels would be deemed worth intervening in the market, but a continued slide towards 160 or 170 to the dollar could trigger action.It’s hard to imagine the Ministry of Finance letting the dollar go to 160 never mind 170 yen before intervening. Then again, few would have imagined there would be no intervention at 155 yen either.Will MOF instruct the BOJ to wade into the FX market and buy yen just as the central bank starts its two-day policy meeting? In the current climate, which prompted a rare three-way joint statement on exchange rates from the United States, Japan and South Korea this month, nothing can be ruled out. In the realms of surprises, Indonesia’s rate hike to counter the weakness of the rupiah would have caught many market participants off guard. The currency’s subsequent 0.4% bounce was modest, but was the biggest in seven weeks and enough to pull it further from last week’s four-year low.There will be more than a few grumbles across Asia at Tokyo’s reluctance to anchor the yen, which is giving a huge competitive boost to Japan – the yen is at a 31-year low against China’s yuan and close to multi-year lows against the currencies of South Korea, Thailand, Vietnam and others. India’s central bank has intervened regularly recently to support the rupee and Bank of Thailand officials said on Wednesday the BOT intervened to ease excessive moves in the baht.U.S.-Sino relations took another twist after the U.S. Senate voted in favor of legislation that would ban TikTok in the United States if its Chinese owner ByteDance fails to divest the popular short video app over the next nine months to a year.Here are key developments that could provide more direction to markets on Thursday:- Bank of Japan begins policy meeting- South Korea GDP (Q1)- Malaysia inflation (March) (Reporting and Writing by Jamie McGeever) More

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